Athira Sethu
Kochi, 24 Feb 2026
IBM stocks will be on radar on Tuesday after the company’s share fell sharply owing to Anthropic’s announcement on drastically reducing COBOL code modernisation.
IBM’s shares plummeted on Monday by a massive 13.2% to finish the day at $223.35 per share. This comes after a press release from Anthropic, which stated that their new AI technology, Claude Code, could potentially be used to upgrade old COBOL systems. This is a threat to IBM’s mainframe business, as it is heavily dependent on COBOL.
COBOL, or Common Business-Oriented Language, is a programming language that was developed in the late 1950s. It is still in use today for business-related data processing, such as payment systems and retail transactions. In fact, it is estimated that 95% of all ATM transactions in the U.S. are handled by COBOL, according to Anthropic. This makes COBOL a prime target for AI upgrades, which could potentially make it more cost-effective to maintain.
Anthropic’s new solution, Claude Code, is meant to help with the difficult work of modernizing COBOL code. In the past, modernizing COBOL code was a time-consuming and highly technical process. However, with the help of Anthropic’s AI, businesses can now update their COBOL code more quickly and affordably. For instance, Claude Code can help to create flowcharts of COBOL code, as well as point out risks, which would take human experts months to do.
According to a blog post by Anthropic, “The application of AI has revolutionized the process of COBOL modernization by making it more affordable and efficient.” They also pointed out that the number of people who know COBOL is dwindling, making it difficult for businesses to maintain their legacy systems.
The entry of AI in this industry is a significant shift. In the past, modernizing old code was so expensive that it was easier to simply replace the system. However, with the advent of AI, it is no longer as expensive to modernize COBOL code.
This is a part of a larger trend in which AI is disrupting various industries by providing cheaper and faster solutions for upgrading outdated technology. Anthropic is trying to assist companies in upgrading their legacy systems, which can sometimes get stuck due to slow developer productivity and “technical debt,” which refers to the long-term costs of using quick fixes in software.
This news is just the tip of the iceberg in a series of AI-related challenges that companies such as IBM have been facing. In the past few weeks, the fear of being replaced by AI has caused a great deal of turbulence in the stock market. For instance, on Friday, the stock of cybersecurity firms fell as Anthropic announced a new feature of Claude Code called “Claude Code Security,” which scans code for security vulnerabilities. The fear of being replaced by AI has left investors on edge, and this is why there have been such sharp market sell-offs.
IBM’s stock price has fallen by more than 24% since the start of the year due to the fear of AI disruption.
